Bitcoin investing service BitConnect Ltd. is exiting its investment and exchange business following negative publicity and a number of cease-and-desist notices from U.S. states.

The company, established in 2016, originally launched as a platform that allowed bitcoin holders to lend bitcoin to others for a given interest rate. Over time it evolved to also add exchange services, support for other cryptocurrencies and, where much of its troubles have come about, an “investment” service. The site also offered its own cryptocurrency, the BitConnect Coin, which could be used for investment opportunities on the site.

Those investment opportunities bizarrely included lending bitcoin to BitConnect itself with promises of oversized returns. For example, at one point a $10,000 loan for 180 days promised a return of 40 percent each month along with daily bonuses. If that sounds dubious, it’s because it appeared to be a Ponzi scheme where new investors were paying the returns of existing investors, and that didn’t go unnoticed.

Both the North Carolina Securities Division and the Texas Securities Board served the company with cease-and-desist letters on the grounds that BitConnect was not registered to offer securities in their states. North Carolina also claimed that BitConnect provides misleading information about its platform and the volatile nature of investing in general. The state also said the website fails to disclose material facts about the company, including the identity of its founding members, location of its operations, information about asset liabilities and guarantees, source code behind its proprietary “trading software” and the fact that affiliate reps who receive referral rewards are in violation of the Securities Act.

Despite media reports that BitConnect is closing down, the company is only divesting itself of its exchange and investment services and will continue to offer other services, including its cryptocurrency wallet and news service as well as its coin and initial coin offering services.

“We will keep working to make BitConnect coin available to merchant websites providing them API access to accept BitConnect Coins on their platforms,” the company noted in a blog post. “BitConnect X ICO is still functional and we are building an exchange platform on the BitConnect X website. With BitConnect X operating as an exchange platform, BitConnect Coin (BCC) will be listed there.”

Whether it can make a go of the other services given the drama surrounding their closed ones remains unclear.

Image: BitConnect